About a month before he was arrested trying to flee into Siberia, Liu Yong, one of modern China's most infamous gangsters, took a less eventful trip -- to Las Vegas.
During his sojourn there in June 2000, Liu, whose day job was as a local legislator, is believed to have lost several million dollars playing baccarat at the MGM Grand Hotel, industry sources said.
Liu, now in a Chinese jail for ordering between 30 and 40 murders and embezzling the equivalent of millions of dollars, is just one of the high rollers China's economic boom has produced. For the past several years, wealthy Chinese officials, businessmen, bookies and gangsters have been cutting a golden path to the casinos of Las Vegas, losing vast sums of money, much of it not theirs. Their exploits combine capitalist-style excesses of the rich and famous with post-communist sleaze, and Vegas's glitter with China's ancient fascination with gaming, while reflecting China's mind-boggling corruption and its record-breaking economic growth.
Gambling executives say China's big-time gamblers could become the fastest-growing market among high-stakes Asian players, outstripping those from Hong Kong, Taiwan and Japan. While the number of Japanese tourists visiting Las Vegas is still 10 times that of Chinese, the increase in high rollers from China and the amount they are willing to gamble have captured the imaginations of Vegas's gambling industry.
Starting several years ago, the MGM Grand, Harrah's, the Venetian, Caesars Palace and the Stratosphere, among others, opened offices in China or began dispatching representatives to China to organize groups of high-stakes gamblers. Casinos from South Korea, the Philippines, Australia and North Korea have followed suit.
"Asians are the only growing segment of the casino market," said Bill Chu, Asia regional marketing director for Harrah's Las Vegas. "And the Chinese are the only people in Asia with cash. Hong Kong is dried up. Taiwan is dried up. Forget Japan. Thailand is history."
American companies also vied for a chance to open casinos in Macao this year. But many Chinese "whales," as they are called in the industry, do not like the sleazy former Portuguese territory that returned to Chinese control in 1999. One reason is that state security agents roam the gaming halls videotaping fat cats. One of them, Ma Xiangdong, executive deputy mayor of the northeastern city of Shenyang, was executed late last year after he appeared on a tape. Ma had lost $4 million in public funds on 17 trips to Macao.
In Las Vegas, losses by Chinese have been extraordinary, rivaling losses by Hong Kong and Taiwanese players during the mid-1970s. Some Chinese gamblers have dropped $10 million and cannot go home for fear of having to explain where the money came from, industry sources said. One Chinese businesswoman, known as the queen of scrap metal from the northeastern city of Dalian, lost $20 million last year in 10 months, gambling executives said. She cannot return to the United States because of her debts. Over the Chinese New Year, several Chinese gamblers blew $20 million in one night at the baccarat tables at one of MGM's properties, a gambling source said.
A spokesman for the MGM Grand, Alan Feldman, declined to comment on MGM's China business.
But Chu said Harrah's has agents in five Chinese cities and will open an office in Beijing on April 1 to provide support for its guests' visa applications. MGM has two representative offices in China and part-time assistants digging up high rollers. Chu estimated that with luck he could bring in 100 to 500 Chinese players a month gambling in the $30,000 to $100,000 category.
"You put them all together, that's a lot of money," he said.
One problem holding up the boom is the tough visa policies of U.S. consulates in China. Chu said that only 20 percent of Harrah's prospective guests get U.S. visas. MGM does better, at around 50 percent, industry executives said. The consulates demand documentary proof of a guest's financial resources and want to know where the money comes from.
"Our government is saying, unless they show the sources of their money, they're not going," Chu said. "Well, as far as I'm concerned, let's put the dollar in the circle and deal. None of these people want to say how they got their money. They're rich, that's all that matters!"
But U.S. officials say much of the money Chinese bet at tables in Las Vegas is hot -- embezzled from the Chinese government or state-owned businesses, or made illegally, mostly by smuggling. Evidence to back this claim comes from China's state-run press, which over the past few months has described Chinese officials and representatives of state-run firms squandering government money in gambling dens abroad.
In February, the official New China News Agency reported that Jin Jianpei, manager of a Hong Kong-based company from Hubei province, routinely placed bets of $1 million at casinos in Macao during a two-year spree that ended up with Jin losing $20 million in government funds. The average bet of Xie Heting, manager of the Guangdong Province Food Co., was $100,000, the agency said, and Zhou Changqing, the boss of a telephone equipment company in Xian, maxed out at $130,000 a shot. China executed all three for corruption.
Chinese gamblers were estimated to have lost $259 million last year in Macao, according to a report done for an American casino interested in doing business there. Earlier this year, two of the most prominent gambling names in the United States were awarded licenses to operate there. The licenses, granted to Sheldon Adelson and Steve Wynn, ended the monopoly of billionaire Stanley Ho.
In their quest to get to Vegas, many Chinese have found ways around U.S. visa officers by establishing bogus companies and submitting fake documents to hide the source of their ill-gotten gains. Chu said American visa officers in one U.S. consulate routinely allow two of his clients, a bookie and his wife, to travel to the United States.
"The last time he was here he asked me, 'How do I get connected so I can book NBA games?' " Chu said. "Can you picture that? I couldn't believe he got a visa."
Another gambling industry employee said that his clients, who lost $3 million last year, were all private businessmen but had made their money smuggling. "They just hide their wealth," he said. "The Americans are basically looking out for someone who obviously is a government official because there is no way they can explain [their] wealth. Most of the private sector clients can make it in if they are smart."
China also places strict controls on the export of hard currency. Chinese law says travelers can take only $2,000 abroad. So gamblers have turned to sneaking money out. Sometimes they launder funds abroad through an underground banking system based in Hong Kong. Sometimes they pay off Chinese customs officers and take money directly on the plane.
At Shenyang, a major center for high-stakes players, travelers pay customs officials $1,250 for the right to place bags containing greenbacks on the plane, gambling executives said.
Chinese have been gambling for centuries. China's Taoist philosopher Lao Tzu was credited with inventing one gambling game, and Chinese records about betting on dice and Chinese chess matches date back to the Warring States period around 300 B.C.
Shanghai in the 1930s was the site of the biggest gambling dens in the world. China's Communists banned gambling along with prostitution after their revolution in 1949. Both have returned with abandon since the late 1980s. But these days, China's high rollers prefer baccarat, a French game in which the winner's cards add up closest to nine. In Chinese the game is baijiale, or hundred home happy.
Chinese began flocking to Las Vegas in the 1980s on government-organized "research" teams. By the mid-1990s, almost every group of Chinese officials heading to the United States wanted Las Vegas on the itinerary. The justification bordered on the fantastic. One Communist Party document said studying in Las Vegas was good for Communist cadres because they could learn how a poor area in the desert became rich.
Gambling industry sources said Chinese players exhibit some unusual characteristics. One is the size of their bets. Another is the ability to play without sleep.
"It is really amazing," said Robert Goodman, who runs a firm called Great Harvest, which specializes in helping Chinese gamblers get U.S. visas. "The gamblers will stay inside for three days and three nights, never go outside. They don't know what time it is, what day it is. They sit there eating instant noodles, going from baccarat table to table, gambling everything."